Work on Flin Flon smelter on hold until ownership question resolved

With Minorco’s bid for the purchase of Hudson Bay Mining & Smelting (TSE) extended until July 31, the $187-million refit of the Flin Flon, Man., smelter remains on hold. Minorco, a Bahamian affiliate of Anglo-American Corp., is the principal stockholder of Inspiration Resources (NYSE) of New York, with Inspiration itself the owner of HudBay. It is a convoluted relationship and in marked contrast to the simple ownership (primarily of the Whitney family of New York) which financed the raw Flin Flon prospect to production in the mid-1920s and maintained clear control for the following 35 years. HudBay’s need for the injection of fresh capital was triggered by a Canada-Manitoba agreement requiring the company’s smelter to reduce sulphur dioxide emissions by 25% and airborne particulate emissions 50% by Jan. 1, 1994. The smelter was state-of-the-art when it was built in the late 1920s, with roasting of the copper and zinc concentrates the essential first step in the production of these metals by electrolysis. The roasting process generates massive volumes of sulphur dioxide and all of the gases at Flin Flon were, and still are, ducted to the smelter stack for disposal. Like its neighbor (Inco Ltd.) at Thompson, Man., there is no plant for the conversion of sulphur dioxide to sulphuric acid as there is no nearby market for the acid. The nearest consumers of bulk acid are 1,450 km away by rail. Research into alternative smelting methods was initiated by HudBay several years ago and the proposed improvements include replacement of the greater part of both the copper and zinc production lines. Zinc production will be carried out exclusively by hydrometallurgical means. The Sherritt Gordon autoclaving process will eliminate the zinc roasting plant and its concomitant sulphur dioxide. Copper concentrates will be treated by the Noranda process that uses oxygen enriched air and is far more efficient than the present roaster and reverberatory furnace establishment. Nameplate capacity of the new zinc plant will be 104,000 tonnes per year and 77,000 tonnes of anode copper for the copper plant. In all, the smelter’s sulphur dioxide production will drop from today’s maximum of 293 kilo tonnes per year to 220 kilo tonnes when the new regulations come into effect in 1994. (The limit set for Inco’s smelter at Thompson is the same.) Unlike many of its contemporaries (for example, Falconbridge and Cominco), HudBay did not expand globally after the Second World War. Even in Canada, its exploration efforts outside Manitoba were sporadic. As if to compensate, the company explored the immediate vicinity of Flin Flon with an intensity that earned it the reputation for knowing just how to use saturation exploration techniques. How successful it has been is evidenced by the more than 20 mines the company has developed during the last 40 years with many of them within sight of the smelter’s smokestack. The most unusual of these is Namew Lake, unusual because of its copper-nickel content. All of HudBay’s other mines produce copper and zinc, the staple of the Flin Flon smelter. Namew Lake came into production in November, 1988, under a joint venture arrangement with Outokumpu Mines. Outokumpu’s interest is 40%. Initial ore reserves were quoted at 2.82 million tons (2.56 million tonnes) grading 2.44% nickel and 0.9% copper. The grade has since been pared to 1.97% and the orebody is expected to be exhausted by 1993. As if to perpetuate the unusual features of the mine, Namew introduced a highly mechanized mining system to extract the variable width orebody (up to 10 metres) dipping at 48 degrees. The method comprises the drilling of 3-metre-diameter raises on the dip of the ore and blasting out the ore for a distance of 8-9 metres on either side. Drilling is performed by electro-hydraulic drills. High productivity is achieved at some loss in control of the grade of the broken ore. When alternating stopes have been mined out, they are backfilled with cemented rock fill and the intervening pillars are mined. Broken ore is hoisted through the 415-metre shaft and treated in the computer- controlled 1,900-tonne-per-day mill. HudBay’s 60% share of the nickel concentrates is shipped to Sherritt’s smelter at Fort Saskatchewan, Alta. Outokumpu’s share is treated by Inco’s smelter at Thompson.